Broadcasters: The move to digital

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While the linear TV business seems to be a sinking ship, UK broadcasters are still showing signs of relevancy as they make strong headway in their transition into the digital space.  

Though 2023 may of seemingly been the year for SVODs, with subscriber growth across Netflix and Disney+ ad-supported tiers. UK broadcasters also had their shine with significant engagement boost across their online streaming services amidst last year and going into 2024.

This week ITV reported on New Year’s Day the broadcaster’s AVOD platform ITVX was streamed 8 million times. This figure represented an increase of 2.5 million streams, up by more than 44% compared to last year. Overall, since the ITVX launch in December 2022 the streaming service has reached 3 billion streams and gained more than 40 million registered users.

Similarly, BBC iPlayer broke streaming records during the Christmas period. The streaming platform registered 177 million streams which marked a 7% increase from the previous year and earned 29.8 million streams on New Year’s Day. In addition, during the week running December 23 – January 1 2024, it recorded 16.5 million accounts signed into BBC iPlayer. The PSB said this figure is up by 5% compared to the year before.

Channel 4 also showed strong digital engagement throughout 2023, with a total of over 53.5 billion viewer minutes consumed on the streaming platform. It reported Channel 4 earned an additional 10 billion minutes of streaming during 2023 compared to 2022, equivalent to a 24% increase.

Though these figures may not compare to the extremely vast audiences that streaming giants are able to pull, it highlights broadcasters have the capacity to deliver and produce in the online market, showing signs of an existing and growing audience for these services. Also in conjunction with the recently government-published Media Bill which will lead to stricter regulations of international streamers, we can even possibly see a more level playing field in the UK where broadcasters can play a more instrumental role in the online market.

Omdia goes further to predict there will be a new market evolution entirely where users will make the move from paid to free online video such as FAST and AVOD services. This could see digital platforms such as Channel 4 and ITVX thrive.

In a Omdia report, the media market firm outlined that subscription churn for paid online services is expected. It explained following last year’s industry strikes, spending cuts across content and the launch of advertising, will somewhat negatively affect the viewing experience of some customers.

“The movement from pay to free will happen, but there will still be room for paid services to continue to flourish. The balancing act will be precarious, meaning a suboptimal execution of strategy could threaten growth. So, the danger remains that the industry will create a perfect storm for itself,” said Omdia analyst, Adam Thomas. “The ongoing cost-of-living crisis will hit discretionary income, and the attractiveness of free video from FAST and AVOD is growing as a viable alternative that many may start to see as not altogether different from the paid-for services”.

US market

In the US, where according to Parks Associates’ latest report just 5% of US internet households have only a pay-TV service, we are seeing cable providers also make the migration to digital to contend with increasing losses. The market research company pointed to traditional telcos such as Cox Media making the move into FAST, with the launch of streaming channel Neighborhood TV. As well as TV stations Sinclair and Hearst launching local streaming services.

In a report on the North American streaming market, Omdia has forecasted online subscription revenue to eclipse North American pay-TV revenue for the first time in 2026. It comes as the cord-cutting movement is gaining momentum and the SVOD market continues to expand.

Omdia analyst Sarah Henschel, said, “live sports and news content keep consumers tied to pay-TV subscriptions. US consumers are opting for virtual pay-TV subscriptions more often for live sports content because packages can be cheaper than traditional pay TV, and they can be shared across multiple households. As pay-TV subscriptions decline, telcos are shifting their focus toward aggregation, bundling, and broadband connectivity. Consumers are looking for aggregation solutions to make billing management and content discovery easier.”

The growing online audience for UK broadcasters’ digital services signifies a key driving force for success in the online market. On top of this, with upcoming live sport events including Summer Olympics and the UEFA Euros we can expect an additional surge amongst online viewers. However in broadcasters pivot to fully digital, Omdia raises the next point of concern is prioritising their advertising businesses in order to have longevity in the streaming market.